Security Technology

“At Any Given Time, $200M in Bogus US Bills Is In Circulation Worldwide”

The big business of fake money: The new $100 bill is the U.S. government’s latest bid to stay one step ahead of counterfeiters.

How widespread is counterfeiting?

At any given time, some $200 million in bogus U.S. bills is in circulation worldwide, authorities say. About $60 million of those fakes circulates through the U.S. each year. Counterfeiting represents only a tiny fraction of the $800 billion in circulation, but it can be a nightmare for merchants or consumers who end up with the phony bills, because counterfeits can’t be exchanged for the genuine article. “It’s like a hot potato,” says Secret Service agent Bill Leege. “Whoever’s stuck with it is stuck with it.” In 2005, counterfeiters in Washington, D.C., laundered $3,900 through the Amen Gift Shop’s Western Union terminal, paying for wire transfers with phony money and collecting real cash on the other end. Shopowner Nwaka Egbulem had to reimburse Western Union out of his own pocket and shuttered his business. “It was devastating,” he says.

How old a problem is this?

Older than U.S. currency itself. During the Revolutionary War, the British circulated counterfeit Continental dollars throughout the Colonies, aiming to mess up their economies. The effort was so successful that an object deemed to have no value was said to be “not worth a Continental.” After the Revolution, the U.S. government allowed private banks to issue their own notes, theoretically redeemable for gold or silver. But with hundreds of private currencies in circulation, it was virtually impossible to distinguish real notes from the fakes, and by some accounts, half the bills in circulation were bogus. During the Civil War, the Confederates circulated so many counterfeit notes from Northern banks that in 1865, Abraham Lincoln established the Secret Service to track them down. It was the beginning of a cat-and-mouse game that continues to this day.

Who are the players?

Until the advent of personal computers and printers, counterfeiting was dominated by skilled specialists backed by criminal organizations, which could afford engraving tools, special inks, and printing presses. The government countered them with technological advances, such as presses that printed black ink on the front of bills and green on the reverse—hence the term “greenbacks”—and highly detailed engraving. These days, lower-quality bills tend to be made by small-time criminals out for a quick buck. Instead of printing thousands of bills at a time, says Treasury official Ringan Doty, counterfeiters “just print enough to get them through the day.” Higher-quality fakes, known as supernotes, are produced mostly by regimes hostile to the U.S., which according to the State Department use government presses equipped with the latest technology.

Is it easy to produce fakes?

Too easy. Today’s counterfeiters can simply scan a bill into a computer and print out an accurate copy on a high-resolution printer. Even finding the right paper poses little problem. Since 1879, the U.S. Mint has used a proprietary blend of linen and cotton fibers produced solely by Crane Paper in Massachusetts. It’s virtually impossible for amateurs to duplicate, but counterfeiters can create reasonable facsimiles using high-rag-content paper. Such fakes are not hard to spot—as long as the person receiving the bill is paying attention. That’s why counterfeiters like to pass bad bills in dimly lit bars or during busy periods at fast-food restaurants. “When it’s lunchtime at McDonald’s and everyone is screaming for their Big Macs, it’s hard for an employee to check out every bill they’re handed,” says Thomas Farrell of the Secret Service.

Aren’t there machines that detect fakes?

Yes, but even they can be defeated by one popular counterfeiting technique. Counterfeiters have been bleaching $5 bills and superimposing Ben Franklin’s portrait and the $100 denomination on them. Melody Shimmel, a bank security expert in Florida, admits she’s been fooled by such fakes. “I’m an old teller from 35 years back,” she says, “and I can’t feel a difference.” About the only way to spot one is to hold the bill up to the light and look for the watermark. If it’s a portrait of Lincoln rather than Franklin, the bill is a phony. Always trying to stay ahead of the counterfeiters, the U.S. redesigns its bills every seven years or so. The new $100 note is the latest such effort, and it’s considered the most sophisticated paper money ever printed.

What’s so special about it?

The new C-note features ink that changes color when the bill is twisted, multicolored magnetic threads embedded in the paper, and images, including the Liberty Bell, that appear and disappear when the bill is turned this way and that. But criminals can still fake older designs. And passing them may be getting easier, ironically because the government has been so good at removing counterfeits from circulation that most people don’t expect to see bogus bills. “To some degree,” says Tom Ferguson of the U.S. Bureau of Engraving and Printing, “we’re a victim of our own success.”

The elaborately redesigned $100 bill won’t hit the streets until February 2011, but it’s already got people talking, both here and abroad. As the most-widely circulated bill in the world, the Benjamin is also the most counterfeited — thus the colorful and technically complex new bells and whistles. Here are some numerical facts and figures about the C-note:

11.8: The cost, in cents, to make each new $100 bill, up from 8 cents currently

650,000: Number of light-shifting “micro lenses” in the new 3-D security thread on each bill

$46 million: Estimated value of the government’s contract with Crane & Co., the Mass. company that makes the threads

89: Life span, in months, of the typical $100 bill

1996: The year of the $100 bill’s last redesign

1862: The year of the first $100 bill issued by the U.S. government

1914: The year Benjamin Franklin first appeared on the $100 bill

1:10,000: Ratio of counterfeit to legitimate U.S. currency notes in circulation, according a 2006 U.S. Treasury report

1:3: Ratio of counterfeit to legitimate U.S. currency notes in circulation during the Civil War

$45 million: The amount of counterfeit $100 bills, or “supernotes,” made by North Korea, according to a 2009 Congressional Research Service report

$200,000: The amount of counterfeit cash passed in New York City each week, according to one expert

6.5 billion: Number of $100 bills in circulation

66: Estimated percentage of C-notes circulating outside U.S. borders

25: Number of languages the Treasury is using to spread information about the new bills

$31.4 billion: Increase in the volume of $100 bills in circulation in 2009

4:10: The time on Independence Hall’s clock on the back of the $100 bill

SOURCES:
The Week: The Big Business of Fake Money”
The Week: “100 Bill Redesign By The Numbers”

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